AI Boom Drives NVIDIA to First-Ever $4 Trillion Market Cap

On Wednesday, NVIDIA briefly crossed the $4 trillion market capitalization milestone, becoming the first company worldwide to achieve this historic valuation. This milestone further reinforces NVIDIA's position as one of Wall Street’s most favored stocks.

Driven by the surging demand for artificial intelligence (AI) technologies, the leading chip design company's shares rose as much as 2.8%, reaching an all-time high of $164.42. The stock closed the day up 1.8%, with a market value of $3.97 trillion.

NVIDIA's soaring market capitalization highlights Wall Street's strong confidence in the rapid advancement of AI, with the company's high-performance semiconductor chips serving as a critical foundation for these technological breakthroughs.

Earlier this year, NVIDIA's stock experienced some volatility due to concerns sparked by the emergence of China's AI models developed by DeepSeek. However, the company's valuation has since rebounded significantly.

NVIDIA first surpassed a $1 trillion valuation in June 2023 and has since more than doubled its market cap within approximately one year. This growth rate has outpaced major U.S. companies such as Apple and Microsoft, each valued above $3 trillion.

Microsoft remains the second-largest U.S. company by market cap at $3.74 trillion, with its shares rising 1.4% to close at $503.51 on Wednesday.

NVIDIA's stock has recovered roughly 74% from its April lows, which were influenced by global market uncertainties triggered by former U.S. President Donald Trump's tariff policies.

Recent optimism surrounding trade agreements with key partners has supported broader stock market gains, with the S&P 500 index reaching record highs. NVIDIA accounts for 7.3% of the S&P 500 index, while Apple and Microsoft represent approximately 7% and 6%, respectively.

According to data from the London Stock Exchange, NVIDIA's current market cap exceeds the combined value of the Canadian and Mexican stock markets and surpasses the total market capitalization of all listed companies in the United Kingdom. Its forward price-to-earnings ratio over the next 12 months stands at 32, below its three-year average of 37.

While NVIDIA dominates the AI chip market, its key clients—including Amazon, Microsoft, and Alphabet—face investor pressure to manage the substantial costs associated with AI investments. Additionally, competitors such as AMD are aiming to capture market share by introducing lower-cost processors.

NVIDIA reported first-quarter total revenue of $44.1 billion, marking a 69% year-over-year increase. The company forecasts second-quarter revenue of approximately $45 billion, with a 2% margin of error. The second-quarter earnings report is scheduled for release on August 27.

Including Wednesday's gains, NVIDIA's stock has risen approximately 22% year-to-date, outperforming the Philadelphia Semiconductor Index (.SOX), which has increased nearly 15% during the same period.